Tracey White: Performance management has to be the biggest driver of manager and employee discontent at organizations. Last month, we learned that fully 97 per cent of managers say performance management is ineffective, takes the most time of any HR program, and adds the least amount of value.
Research by the Corporate Executive Board also found that current measures of performance management are at best inadequate and at worst counterproductive. But, I was surprised to learn that 71 per cent of organizations operate performance management systems described by Mercer’s Ilana Hechter as “one size fits all.”
Not for nothing is this contentious system under scrutiny. When work is project-driven, organizations are matrixed and workforces are ever more diverse, isn’t it beyond time to admit the performance equation has changed?
In our knowledge-driven economy, creating value requires open information flow, teamwork and collaboration. In a 2012 article, Vanity Fair famously analyzed Microsoft’s “lost decade” and pinned some of the blame for the company’s loss of momentum on its stacked ranking performance management system.
Microsoft blamed the dysfunctional program for crippling its ability to innovate. When the company abandoned the practice, a memo to employees announced: “The changes we are making are important and necessary as we work to deliver innovation and value to customers.”
Hechter was correct when she observed we have to move beyond box-checking exercises that are more about the system than people.
Paul Pittman: The problem with consulting surveys is that they are always 10 years behind current thinking and the results are never a surprise to anyone — we saw this too with the last survey shared with SCN.
Interpreting the results often means how to get participants to within five years of current thinking. It’s a tough gig.
Performance reviews are no exception. We all know the old annual watershed is way past its shelf life, and the alternative involves an organizational overhaul — but so what? You are going to have to do them anyway.
Authenticity and fairness are going to be far more important elements of organizational culture than ever before.
An inconsistent, box-ticking, yearly yawn is neither.
There’s no place for that in the new workplace: “I want to know what you think of me but only in the context of a common assessment model that drives a felt fair recognition.” That makes sense.
The importance of a performance feedback system that is an integral part of the talent management system, aligned with the rhythm of the business, cannot be underestimated.
For example: Are one-time goals important to a business that thrives on process excellence?
How critical is leadership performance in a labour-intensive environment, and the timing of feedback at an organization in a fast-moving sector?
Performance assessment systems need to be integrated with reward and succession, and tailored to the profile of the workforce — for example, its demographic.
Sustained differentiation means one-size-fits-most certainly does not fit all. Why did we ever think it would?
Authenticity means figuring out the events that are at the heart of your business, tailoring a catalyst for examining what will improve them, and recognizing who does best at that and who needs help.
Finally, it is tempting but probably unwise to launch a new system in conjunction with an analytics exercise unless you have several years of interpreting data under your belt.
Jan van der Hoop: Tracey, I think you nailed the root of the problem when you said this is the most expensive and least valuable HR program.
Why it’s even an HR program baffles me. It’s fundamentally wrong.
Who owns the ultimate responsibility for selecting, onboarding, resourcing, training, and providing actionable and motivating performance feedback, if not the immediate supervisor?
Sure, HR provides tools and training for their use, but they can’t possibly intervene as a surrogate for the manager. The quality of the manager-employee relationship is critical to the health and productivity of the work group.
That relationship is sacred and, in my opinion, HR has no business being in the middle.
If the manager is not adept at managing the human dynamic (distinct from managing projects and tasks, to Paul’s point) — teaching, coaching, pushing, challenging, cheering, as appropriate — then they simply are not equipped to lead people. And, no amount of performance management forms, reports, policies or training flowing out of HR is going to make up for that lack of capability.
In fact, it makes it worse.
As Hechter said, performance management happens in the context of a relationship, a conversation. You really don’t need anything more elaborate than the back of an envelope to document it.
If you have great managers (meaning the right people with the right training), you can rest comfortably in the knowledge that performance management is happening every day, in every interaction with a manager.
And, if you don’t have great managers, it’ll never happen —regardless how much you huff and puff.
Silvia Lulka: This topic evokes such strong views.
To get to the heart of it, we need to ask: “What purpose does this process serve today?” (Or any other process, for that matter).
To your point, Paul, I think authenticity and fairness are part of the answer and, as you note, Jan, this rests on the quality of relationships and conversations.
Tracey, I’m glad you picked up on the “one-size-fits-all” as it often ends up as “one-size-fits-none.”
Bottom line: The process needs to be meaningful for organizations, leaders and employees. It needs to enable the right frequency of two-way conversations that connect organizational, team and individual goals and facilitate learning and reflection.
In some organizations, that cadence may be weekly or quarterly. In some, it may include quantitative measures that easily tie to a rating number; in others, it will be more qualitative.
As with so much of what we do, the “how” of this topic (how to meet the needs of the organization, how to enable learning, how to have the conversation) is as important as, or more important than, the “what” (such as the process itself and the ratings).
White: This may have been one of our most impassioned discussions. As Silvia notes, performance management certainly engenders strong emotion. Maybe that’s the key here — it evokes emotion because appraisal is one of the most emotion-laden activities we can engage in as human beings.
The Neuroleadership Institute’s David Rock tells us that no business process could be better conceived to evoke the primitive fight-or-flight response. We like to think of business processes as rational — clearly performance management is one that needs to be reconsidered. It’s time to do better.